Although profit suffers huge dip.
Despite a significant 80% fall in profit, in part reflecting the closure of three stores, the Myer online business performed strongly with sales up 41.1%, for the 52 weeks to 29 July 2017.
Omni-channel sales, including sales via the 2,500 iPads in store, reached $177 million during the year now representing a penetration of 8.2% of total sales in July 2017. Click & Collect now represents 15% of orders in July 2017.
Myer CEO and managing director, Richard Umbers said, “We have made significant progress to deliver New Myer which has assisted the company to withstand the challenging retail trading conditions characterised by heightened competition, subdued consumer sentiment and discount fatigue.
“We are obviously disappointed to have not reached our target of exceeding last year’s NPAT of $69.4 million and that progress against our metrics that matter is slower than we anticipated. However Myer has become a leaner, more productive and efficient retailer, better placed to compete in a rapidly changing environment. In the year ahead we will be rolling out further initiatives particularly in our strongly performing omni-channel business in anticipation of a further wave of change in consumer and competitor behaviour.
“We continue to make significant progress in our productivity agenda with a 24,368m2 reduction in space resulting from store closures at Wollongong, Brookside and Orange, space handback at Cairns and Dubbo as well as a space hand back of 50% at our Queensland DC and over 30% of our support office floor space.
Myer confirmed that it will not be renewing leases at Colonnades, Belconnen and Hornsby. Since the launch of New Myer in September 2015, we have closed or announced the closure of 74,670m2 of store space overall.
“Myer has continued to focus on a more innovative and experiential retail offer including the launch of cafes, pop-up shops, an ice rink in our Sydney store, a marketing campaign partnering with Katy Perry and dedicated clearance floors now in eight stores.”
Sales in the first six weeks of FY2018 are below expectations. The business is well placed for the upcoming and more significant trading periods of Spring Racing and Christmas. Myer notes that consensus for underlying NPAT in FY2018 of $66 million already factors in a subdued start to the year.
Myer is planning to host a Strategy Day in Melbourne on November 1, 2017.